For those businesses located in the State of New Jersey, the state does not (yet) have proactive legislation in place requiring businesses to take “reasonable” measures to protect personal information of residents.  However, if you have customers and/or personnel from outside the State, you may already be subject to the proactive legislation requirements of other jurisdictions.

Last year, we shared information regarding the New York SHIELD Act, which now requires any business that receives, collects, stores, processes and otherwise manages personal information regarding New York residents to take proactive, reasonable measures to secure that information.  If a business fails to take such measures, and the data at issue is subsequently breached, the company can face harsh fines.  Moreover, if the same company had posted on its website that it took reasonable measures to secure customers’ data, but failed to meet the standards of the NY SHIELD Act, this could also be charged federally as a violation of the Federal Trade Commission Act as a deceptive trade practice.  Remember also that under the NY SHIELD Act, the mere access (without exfiltration, alteration or removal) of personal information is a reportable breach if that data is not encrypted.

Now, Massachusetts’ Attorney General has indicated that it, too, will be pursuing companies that fail to comply with Massachusetts’ law (which has been in effect since 2010).  This law requires businesses that collect, store, process and otherwise manage personal information regarding Massachusetts residents to have a WISP or written information security program.  Of course, having a program that is followed in the exception does not equate to compliance.

At present, only the California legislature has given individuals a statutory private cause of action if a business fails to take “reasonable” measures to protect residents’ personal information and that information is then compromised.  As seen in the Dittman case in Pennsylvania, however, courts have found that a cyber breach is a “foreseeable” risk, and even absent proactive legislation impacting your business, if you have not taken measures to prevent this foreseeable risk, you can be held liable when the “if” becomes when and that data is breached.

Being proactive may not prevent a breach, but it will help to protect your business from fines and private litigation.

Please contact your attorney when you are ready to take this important step to protect information regarding your business, its employees and customers.

On October 29, 2020, the Cybersecurity and Infrastructure Security Agency (CISA), the Federal Bureau of Investigation (FBI) and the U.S. Department of Health and Human Services (HHS) warned of an increased, imminent threat to U.S. hospitals and healthcare providers. The agencies have credible information that malicious cyber actors are targeting the healthcare and public health sectors with malware such as Ryuk, Conti, TrickBot and BazarLoader. Use of this malware can result in ransomware attacks, disruption of healthcare services and data theft. The joint CISA, FBI and HHS alert (AA20-302A) can be found here. The alert references a joint CISA MS-ISAC ransomware guide with best practices that can be found here.

We urge our healthcare and public sector clients to increase protective measures to prevent ransomware attacks, such as alerting employees to be vigilant with respect to phishing attempts and ensuring software and operating systems are patched and updated. Additional steps include: regularly backing up systems and data; ensuring passwords are robust and changed periodically; minimizing access so that personnel credentials only allow each employee to access information related to his/her/their duties; and with remotely working personnel and outside resources, making sure your points of contact are current. It is also a good time, if clients have not done so already, to establish or reassess your entity’s cyber incident response plan.

Attorneys at CSG are available to assist with your cybersecurity needs, to train personnel, prepare and update incident response plans, and help you appropriately respond to a ransomware attack or other security incident, should one occur.

On August 30, 2020, the California Legislature passed AB-1281 which, if signed by Governor Newsom, will extend two key exemptions to the California Consumer Privacy Act (the “CCPA”) until January 1, 2022.  The extension of these exemptions, which will otherwise expire on January 1, 2021 without legislative or voter action, will come as welcome news to businesses as they continue to implement CCPA-compliant policies and procedures.

The two exemptions are the “employee” exemption and the “business-to-business” (“B2B”) exemption:

  • The employee exemption provides that personal information collected by a business in the employment context is mostly exempt from the CCPA provided that it is used (1) in the course of an individual’s employment, (2) to maintain an emergency contact on file, or (3) to administer benefits to another person.
  • Under the B2B exemption, personal information reflected in communications between businesses is largely exempt from the CCPA if the consumer is acting on behalf of a business and is conducting due diligence or providing or receiving a product or service.

The California Privacy Act Rights Act (“CPARA”), if approved by California voters in November, will supersede AB-1281’s extensions.  The CPARA, however, would in fact further extend these exemptions until January 1, 2023.

For more information as to the extent of these exemptions, CCPA generally, and other states’ privacy laws, please contact us.

CSG/LIFARS webinar_Cybersecurity and Data Protection Best Practices Amid COVID-19

CSG’s Michelle A. Schaap will join Ondrej Krehel, CEO and Founder of LIFARS, LLC, and Roota Almeida, CISO with Delta Dental of New Jersey and Connecticut, on Wednesday, July 29, from 3:00 – 3:45 PM EDT for a virtual discussion around strategy and best practices in the face of the current escalated legal and cyber threat landscape.

The program entitled, “Giving Diligence its Due: Timeless Strategies for Surviving Change,” will cover a range of topics including:

  • The impact of an increasingly remote workforce on compliance policies and procedures
  • The value of implementing written data protection procedures
  • How to prepare for due diligence questionnaires
  • Cybersecurity frameworks to help ensure compliance with current regulations

To register for this program, please visit the event website.

Today, July 16, 2020, the Court of Justice1 invalidated Privacy Shield as a means to self-certify that a business is securely and appropriately protecting personal data when transferring such data from the EU to the United States. In part, the Court found that the Privacy Shield did not adequately ensure individuals’ audit rights or appropriate recourse, and therefore, the Court invalidated Privacy Shield, effective immediately. There is no grace period. 

This same court invalidated the Safe Harbor in 2015, and Privacy Shield then replaced that Safe Harbor.

This ruling impacts more than 5,000 companies that incurred the time and expense to self-certify under Privacy Shield. Continue Reading No More Safe Harbor… Take Two: Immediate Invalidation of Privacy Shield

The FBI issued an alert warning of an attack targeting e-commerce websites.  The bad actors are embedding code directly into the e-commerce site to then skim account information.

The notice, found here, provides the details of this attack.

As always, the best defense against this and other cyberattacks is to have layers of defenses and proactive policies and procedures in place, including:

  • Patching systems, including operating systems, software and third party-sourced code
    • Patching systems includes ensuring that your remote work force is keeping their devices touching the company’s environment patched, too
  • Keep anti-virus and anti-malware up to date
    • Remote staff members should be accessing the company’s environment through a secure VPN
  • Disable extensions and functions within your site that are not being used

Also, remember that less is more:  If you have inactive accounts, consider removing these from your live, connected and operating environments and, instead, retain that data only in off-line archives.  Further, review your data destruction policies, and delete old and/or superseded account information.

Other best practices for e-retailers include:

  • Remind customers to use robust passwords
  • Direct customers to not use the same password for multiple accounts
  • Remind remotely working employees to not use the same device for work access as family members use to game, visit school sites and/or visit other e-commerce sites

Be alert, be aware and be secure.

You are in a fantasy football league registered under your email and your password.  Unbeknownst to you, however, the league’s site has been breached, and access credentials have been stolen.  The site discovers the breach, investigates the breach, and gives notice to impacted individuals.

If you are lucky, the time frame from when the original breach occurred and when you receive notice is 60 days;  more likely it will be a longer time frame – potentially 18 months or longer.  In the meantime, because you reuse your password for multiple accounts, the bad actor that compromised the fantasy league site has already used your password to access your Gmail or AOL account, reset your password, and has logged into your bank account and drained your funds.

Sound like a bad made-for-TV movie or detective show episode?

Sadly, the scenario outlined above is true and happened to a gentleman in Texas, and was shared during a recent InfraGard¹ webinar. Continue Reading The Life of a Data Breach: The “Gift” That Keeps on Giving

The “kill chain” is a phrase that refers to the FBI’s ability to interrupt or kill the miswiring and loss of funds.

This is an extremely powerful resource given that cyber criminals have been targeting entities that use Microsoft Office 365 and Google G Suite to perpetuate business email compromise (BEC) scams.  The “phish kits” used for this particular attack enables the bad actor to mimic the otherwise legitimate cloud based email to compromise accounts and lure victims into sending or misdirecting funds. This scam has been used over the past 5 years by cyber criminals targeting Microsoft 365 and Google G Suite to steal more than $2.1 billion dollars.

If any of your clients are fooled by a spoofed email, phish or link and miswire funds, if they notify the FBI within 48 hours (sometimes as long as 72 hours, but the sooner the better chance of success) there is a strong probability (not guaranteed) that the FBI can recapture some, if not all, of the funds, but the party that sent the funds must alert the FBI within this window for any chance of success.

We do recommend that impacted companies make contact through our office so that we can be certain information gets to the right agents at the FBI ASAP.

While we always recommend a strong defensive posture – including training of personnel, processes for approval and verification of any requested wiring of funds, and other appropriate measures – even with vigilant personnel, good people are being fooled.

Please contact us to discuss training for your personnel, developing, reviewing and/or improving your processes, and to make introductions for you with your local FBI agents before you need to call them to activate the kill chain.

Even if your business is based on the East Coast, you are likely to feel the effects of the California Consumer Privacy Act (“CCPA”), which will be effective January 1, 2020.

CCPA applies to for-profit businesses that:

  • Do business in the state of California; collect, or contract with a vendor for the collection of, personal information of “consumers[1]”; and determine the means or purpose of processing the data and…
    • Have annual gross revenues in excess of $25,000,000 OR
    • Buy, receive, sell or share information about 50,000 or more consumers, households or devices for commercial purposes OR
    • Derive more than half of their revenue from selling consumers’ personal information.

So… if you are not doing business in California, or you do not fall into one of the sub-categories enumerated above, why do you need to worry about CCPA? Continue Reading Not in California? Here’s Why the CCPA Should Still Be on Your Radar

States continue to pass legislation addressing the protection and breach of private information and, on July 25, 2019, New York joined the growing trend when Governor Andrew Cuomo signed the Stop Hacks and Improve Electronic Data Security Act (or “SHIELD Act”) into law.  The SHIELD Act significantly amends New York’s data protection and data breach notification laws – expanding their reach beyond businesses operating in New York and imposing new requirements on persons and businesses in possession of New York residents’ private information.

Effective March 2020, the proactive portion of the SHIELD Act will:

  • Apply to any business that has personal information (“PI”) regarding any New York resident
  • Require those businesses to adopt proactive measures to safeguard that PI
  • Require businesses to vet vendors entrusted with or with access to that PI

The amendments to the current New York breach notification law, effective on October 23, 2019, “redefine a “breach” to include the “mere” unauthorized access to PI (expand the law beyond the actual acquisition of such PI without authorization).

While the amendment to the breach notification requirements may not greatly impact businesses’ current practices, the proactive requirements will be felt by any business that is not already taking “reasonable” measures to safeguard PI in their control.  And if you are a vendor to any of these businesses, and you are not prepared to adopt the requisite proactive measures to protect PI entrusted to you, then you may lose that business. Continue Reading The Long Reach of New York’s SHIELD Act